March 29th, 2022 Mortgage Industry Update
The Bank of Canada announced on March 2nd that its overnight lending rate will increase to 0.50% from 0.25%. The prime rate has increased to 2.70% from 2.45%. Economies are emerging from the impact of the Omicron variant of COVID-19 more quickly than expected. Overall economic growth is strong across the nation. The Bank of Canada suggests that they will more than likely continue to raise interest rates over this year to tackle higher than anticipated inflation rates.
Additionally this week:
– OECD: Canada has one of the highest house price-to-income ratios out of 38 developed countries. Ratio index reached a shocking 141.9 in Q4 2021 in Canada. The only member country of the OECD with a higher ratio than Canada is the Netherlands, climbing to 148.3 in Q4 2021.
– Statistics Canada: Interprovincial migration increased a dramatic 51% in Q2 2021; just over 123,000 people. Marked largest jump since Q3 1991. Three largest age groups for interprovincial migration were 20-24, 25-29, and 30-34 between the fourth quarters of 2020 and 2021.
– Mortgage Professionals Canada: 90% of current homeowners say they are happy with their decision to buy a home. Only 6% of mortgage-holders say they are currently struggling to make their payments, 23% would have difficulty if their payments increased 10% or less.
– Statistics Canada: Annual inflation was 5.7% last month, up from 5.1% in January. That’s the highest since August 1991 and exceeds the median estimate of 5.5% in a Bloomberg survey of economists. This marked the second straight month headline inflation exceeded 5%.
– Point2: Ten-year analysis of StatsCan figures covering vacancy rates in 150 cities across the country reveal there are approximately 1.3 million unoccupied homes nationwide, but vacancy rates fell over the period of time analyzed. First time vacancies down in 20 years.
– CREA: Average price of a Canadian home hit a new milestone high in February, clocking in at $816,720; 20.6% increase annually. Second-busiest February on record for home sales; 58,200 – a 4.6% monthly increase. Number of homes on market up by over 23% from 62,539 to 77,352.
– Statistics Canada: Households added an estimated $50B of debt in Q4 2021, pushing total credit market debt to $2.65T as of end of quarter. Mortgages added $46.3B to reach nearly $1.95T. For whole of 2021, households took on an additional $187.5B in mortgage debt; a new record.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.